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Douglas Alexander on buying Afghan heroin

Poly Toynbee spoilt her Guardian piece on Afghanistan on the day Douglas Alexander came to Chorlton with a call for government to buy the Afghan poppy crop to stop it falling into the hands of the drug trade; ‘never was a better reason for buying a crop than to bring Afghan farmers in from the world of crime that risks keeping the country lawless indefinitely’. And if you turn the volume right up on your PC, you’ll be able to hear the secretary of state for international development explain why that’s not a great idea.

The minister majors on the lack of legitimate demand for the poppy crop, the need to establish law and order and the better option of finding legitimate work for farmers, which is fair enough.

But there are also sound economic arguments against buying up the crop. Far from removing the incentive to crow poppies, this kind of intervention at least partially legitimises the activity, but worse offers the farmer guaranteed sales at an inflated price. Drug cartels would most likely bid up the price and so the gulf between earnings from legitimate crops and poppies would widen. Higher heroin prices wouldn’t be a bad thing and may cut consumption (there’s only so much an addict can steal) but the programme’s impact would be limited and overall production would most likely rise.

A more sensible intervention might see government guarantee the price of Afghan grains, fruits and nuts. If the price farmers received for these goods were guaranteed to exceed that of poppies, then they might be persuaded to switch. Although here we could expect the market price of poppy to rise as supply dropped off and the market price of grains, fruits and nuts to fall as supply increased. And government would take an ever larger hit as it sold off the produce at ever growing loss. And then there’d be a food surplus to dispose of responsibly. But it might just work.